Iranian Crude Supply to China Collapses Under US Blockade

The US blockade has significantly reduced Iranian crude supply to China as prices surge. According to trade sources, offers of Iranian crude to Chinese buyers have declined by mid-July, with some cargoes being sold at premiums to ICE Brent futures, a shift from the typical discounts.

The number of Iranian oil exports has fallen since mid-July, with no visible crossings of the Strait of Hormuz by supertankers carrying Iranian crude. Data from Kpler shows that Iran's oil exports have plunged to only 100,000 bpd by July 2019 after the US further enforced sanctions and China temporarily suspended purchases.

The squeeze threatens a key feedstock for independent refiners in China's eastern province of Shandong, which account for about a fifth of China's refining capacity. With uncertainty over Iranian supplies, some teapots have turned to Brazil's Lapa crude or Iraq's Basrah crude instead.